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California Building Industry Association v. San Joaquin Valley Air Pollution Control District

October 6, 2009

CALIFORNIA BUILDING INDUSTRY ASSOCIATION ET AL., PLAINTIFFS AND APPELLANTS,
v.
SAN JOAQUIN VALLEY AIR POLLUTION CONTROL DISTRICT, DEFENDANT AND RESPONDENT;
MEDICAL ADVOCATES FOR HEALTHY AIR ET AL., INTERVENERS AND RESPONDENTS.



APPEAL from a judgment of the Fresno County Superior Court. Donald S. Black, Judge. (Super. Ct. No. 06 CECG 02100).

The opinion of the court was delivered by: Levy, J.

CERTIFIED FOR PUBLICATION

OPINION

Appellants, California Building Industry Association, Coalition for Urban Renewal Excellence, Valley Taxpayers Coalition, and Modesto Chamber of Commerce, challenge the validity of two rules adopted by respondent, San Joaquin Valley Air Pollution Control District (District). These rules, commonly referred to as indirect source review (ISR), are intended to encourage developers to reduce indirect pollution, i.e., mobile source emissions, caused by new development projects. Under ISR, the developer can reduce emissions by incorporating pollution-reducing features in the project, or by paying a fee to fund off-site projects that will reduce emissions, or by a combination of the two.

The trial court concluded that the District had the power to adopt regulations to mitigate the effects of indirect source pollution, which included the power to impose fees on persons who cause the pollution. The court further found that these fees were valid regulatory fees.

Appellants contend the ISR fees are development fees subject to the Mitigation Fee Act (Gov. Code, § 66000 et seq.) and that they violate that act. Appellants further argue that, even if the ISR fees qualify as regulatory fees, they are invalid as such. According to appellants, the District did not employ a valid method for creating the fees, did not estimate or compute the total costs of the ISR program, and does not have a basis for fairly apportioning the fees. Finally, appellants assert that the District lacked the authority to impose these fees.

As discussed below, the District had the power to adopt the ISR rules and the fees imposed pursuant to those rules are valid regulatory fees. Accordingly, the judgment will be affirmed.

BACKGROUND

1. The District's Authority and Responsibilities

Two statutory schemes regulate air quality in California, the federal Clean Air Act (FCAA) (42 U.S.C. § 7401 et seq.) and the California Clean Air Act (CCAA) (Health & Saf. Code,*fn1 § 39000 et seq.). Under the FCAA, the Environmental Protection Agency (EPA) is authorized to issue national air quality standards setting the maximum allowable concentration of a given pollutant. (Safe Air For Everyone v. U.S. E.P.A. (9th Cir. 2007) 475 F.3d 1096, 1100.) To assure that these air quality standards are met, the states are required to attain air quality of specified standards and to do so within a specified period of time. (Train v. Natural Resources Def. Council (1975) 421 U.S. 60, 64-65.) To accomplish this goal, states must develop state implementation plans (SIPs) proposing methods for maintaining air quality and submit those SIPs to the EPA for review and approval. (Safe Air For Everyone v. U.S. E.P.A., supra, 475 F.3d at p. 1099.) A state may include an indirect source review program in its SIP. (42 U.S.C. § 7410, subd. (a)(5)(A).) EPA approved SIPs have the force and effect of federal law. (Ibid.) Nevertheless, each state has the primary responsibility for assuring air quality within its entire geographic area. (Train v. Natural Resources Def. Council, supra, 421 U.S. at p. 64.)

The CCAA takes a regional approach to protecting ambient air quality. (§ 39001.) Local and regional authorities, such as the District, have the primary responsibility for control of air pollution from all sources other than vehicular. The California Air Resources Board (CARB) is responsible for the control of vehicular sources of air pollution. (§ 39002.) Nevertheless, air pollution control districts have authority to mitigate vehicle emissions in their use. For example, a district: must adopt transportation measures (§ 40717); is to pay particular attention to reducing the emissions from transportation (§ 40910); and may adopt regulations to reduce the number or length of vehicle trips (§ 4016, subd. (a)(2)).

California districts are also authorized to regulate indirect sources of air pollution (§ 40716, subd. (a)(1)) and must include provisions to develop indirect source control programs in their attainment plans (§ 40918, subd. (a)(4)). Further, the District is specifically required to assess fees on indirect sources of emissions in the San Joaquin Valley to recover the costs of District programs related to these sources. (§ 40604.)

The CCAA does not define the term "indirect source." However, under the FCAA, "indirect source" is defined as "a facility, building, structure, installation, real property, road, or highway which attracts, or may attract, mobile sources of pollution." (42 U.S.C. § 7410, subd. (a)(5)(C).)

The District is responsible for controlling air pollution in the region formed by eight counties in the San Joaquin Valley (Valley). (§ 40600.) In 1993, the Valley was classified as serious nonattainment under federal standards for particulate matter with particle size less than or equal to 10 microns (PM10). In 2004, the Valley was classified as extreme nonattainment for the federal one-hour ozone standards. PM10 can be directly emitted geologic material (dust) or can be formed when precursor emissions, such as nitrogen oxides (NOx) and volatile organic compounds (VOCs), react chemically. Ground level ozone (smog) is formed during summer months when NOx and VOCs react in the presence of sunlight.

Due to the Valley‟s serious nonattainment federal classification for PM10, the District was required to develop an attainment plan that included both a demonstration of future PM10 attainment and provisions to assure that the best available PM10 control measures would be implemented within four years. (42 U.S.C. § 7513a, subd. (b).) The District concluded that the rapid Valley growth, and concomitant increase in motor vehicle use, would result in increases in PM10 emissions. Therefore, as part of its attainment plan, the District committed to adopt ISR regulations to mitigate this increase. The EPA approved this course of action as part of the District‟s PM10 plan in 2004. (69 Fed. Reg. 30006 (May 26, 2004).)

The District was also required to implement all reasonably available control measures on ozone sources because of the Valley‟s extreme nonattainment ozone classification. This is reflected in the District‟s extreme ozone attainment plan, which includes the ISR commitment.

2. The District's ISR Program

The District adopted its indirect source review program, denominated rule 9510, on December 15, 2005, to fulfill its PM10 and ozone plan commitments. Rule 3180, which provides the means for the District to recover its costs of administering and operating rule 9510, was also adopted. The development process for these rules began in June 2003 and included public meetings and workshops. The District received and responded to public comments and conducted analyses of cost-effectiveness, socioeconomic impact, emissions reduction, and environmental impact.

The purpose of rule 9510 is to reduce indirect sources of NOx and PM10 emissions from new development projects. An "indirect source" is defined as "any facility, building, structure, or installation, or combination thereof, which attracts or generates mobile source activity that results in emissions of" NOx and PM10.

Rule 9510 requires a certain amount of emission reductions from each new development project. The District found that, although the number of vehicle miles traveled is increasing valley wide, the majority of new NOx emissions are attributable to new development. However, to ensure that each developer is responsible for only its share of emissions, the District "discounts" each project‟s NOx emissions in two ways. First a 50 percent emissions credit is given. This ensures that a development is only charged for the vehicle trips that would not have occurred but for the development. In other words, only one-way trips from the site are counted. Second, credit is given for the increasingly stringent state and federal vehicle tailpipe controls that will reduce NOx over time.

In contrast, operational PM10 emissions (dust) from a project do not decline over time. Accordingly, rule 9510 requires mitigation equal to half of the emissions after build-out for 10 years. The end result is that projects must reduce their operational NOx emissions by 33 percent and their operational PM10 emissions by 50 percent over a 10-year period.

A developer can accomplish the required emission reductions on-site by incorporating measures to reduce vehicle miles traveled, vehicle trips and/or area-wide sources of emissions such as fireplaces, wood stoves and landscape equipment. Alternatively, the emissions can be reduced through paying a fee to fund off-site emission reducing projects. Finally, the developer can use a combination of on-site emission reduction measures and a fee to fund off-site emission reduction projects.

Under rule 9510, the proponent of a new development project is required to submit an Air Quality Impact Assessment (AIA) to the District before or at the project‟s final discretionary approval by the approving public agency. Either the developer or District staff prepares the AIA by using an approved model to quantify the emissions attributable to the new development. The AIA additionally identifies any voluntary on-site reduction measures that are components of the project design. These on-site reduction measures include increased energy efficiency, electrical landscape maintenance equipment, elimination of wood burning devices, increased residential densities, locating near public transit, incorporating mixed uses (residential/retail), transportation management demand programs, and incorporating pedestrian/ bicycle facilities. The incorporation of such on-site measures can substantially reduce potential off-site fees.

The project information, including any voluntary on-site reduction measures, is input into the Urban Emissions Model (URBEMIS), a District approved computer model that quantifies NOx and PM10 attributable to a development. Another model calculates construction emissions. If the on-site reduction measures do not reduce 33 percent of the project‟s NOx emissions and 50 percent of the PM10 ...


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